CHEMISTRY AND RELATED INDUSTRIES

Transcription

1 Investing in your future EUROPEAN UNION European Regional Development Fund OP Development of the Competitiveness of the Bulgarian Economy Project Promoting the advantages of investing in Bulgaria BG 161PO C0001, with beneficiary InvestBulgaria Agency, has been implemented with the financial support of the European Union through the European Fund for Regional Development and the national budget of the Republic of Bulgaria. CHEMISTRY AND RELATED INDUSTRIES

2 This Chemistry and Related Industries brochure discusses the following sectors: Manufacture of Chemicals and Chemical Products Manufacture of Rubber and Plastic Products Manufacture of Paper and Paper Products Manufacture of Other Non-Metallic Mineral Products The subsectors Pharmacy and Cosmetics are addressed in the Bulgaria Overview brochure

3 CONTENTS 1. Summary 4 2. Bulgaria - Overview 6 4. History Industry Overview Human Resources Success Stories 42

4 Summary Due to its favorable geographic location, Bulgaria exports chemical products to many markets across fi ve continents Exports of phosphorus and nitrogen fertilizers register annual growth at 27% in In the period before 1989, the country was a leader in the manufacture of chemical products such as soda ash, phosphorus and nitrogen fertilizers and medicinal products Bulgaria hosts Europe s biggest synthetic soda ash plant. Companies such as Solvay, Şişecam Group, Saint Gobain, Air Liquide, Italcementi Group, Lukoil develop successful business in the country 4

5 Summary Many investors in the sector highlight the existence of natural raw materials as one of Bulgaria s biggest advantages The country has rich reserves and fi elds of salt, sand, clay, limestone, kaolin, in proximity to existing industrial areas and complexes. Bulgaria combines highly qualifi ed professionals in the sector with competitive prices of labor and high relative labor productivity Over 7000 university students graduate annually in courses relevant to the needs of Chemistry and Related Industries. Readily available facilities and huge unrealized/ untapped potential in the sector open up vast opportunities for business development The country has well-developed electricity and gas networks. 5

6 Overview of Bulgaria Bulgaria has experienced rapid economic growth over the last years coupled with strong fi scal performance: South-East Europe a 122 million inhabitant, high growth market European Union - Bulgaria offers the lowest cost access to a market of 500 million people Russia/CIS, Middle East and North Africa Bulgaria offers a combination of political and macroeconomic stability and incentives for doing business: Stable parliamentary democracy, EU, NATO and WTO member Bulgaria s currency is fi xed to the Euro under a currency board arrangement Lowest tax rate and one of the lowest labour costs in the EU coupled with special incentives for investors EU funding more than 10 bln in EU funds over the next years 6

7 Overview of Bulgaria Bulgaria: Summary Statistics Population: 7.4 million Labour force: 4.6 million Urban Population: 73% Capital: Sofia Time zone: EET (UTC+2) Summer (DST): EEST (UTC+3) Total area: sq. km Land area: sq. km Water area: sq. km Climate: temperate Languages: Bulgarian (official) 85.2% Turkish 9.1% Roma 4.2% English, German, Russian, French: widely spoken Religions: Christian Orthodox 76% Muslim 10% Other 14% Currency: Lev (BGN) Fixed exchange rate: 1 = BGN Corporate income tax: 10% Personal income tax: 10% VAT (standard): 20% Government type: Supreme legislative power: Executive state body: Parliamentary Democracy Unicameral 240-seat National Assembly Council of Ministers, head: Prime Minister EU member since 2007 NATO member since 2004 WTO member since 1996 Source: Bulgarian National Bank, National Statistical Institute 7

8 Overview of Bulgaria Bulgaria has exemplary macroeconomic fundamentals 2011 Economic Snapshot: GDP ( bn): 38.5 Exports ( bn): 25.6 Net FDI* (% of GDP): 3.5 Government debt and government deficit in Bulgaria, Romania, Poland and EU 27, % GDP growth (%): % Unemployment (%): 10.4 Infl ation rate (annual change,%): 3.4 Government deficit (% of GDP): 2.1 Government debt (% of GDP): 17.0 Current account balance (% 0.9 of GDP): Debt Deficit 38.6% 17.0% Bulgaria Romania Poland EU 27 Long-term credit ratings: Moody s: S&P: Fitch: Baa2 stable BBB stable BBB stable -2.1% Source: Bulgarian National Bank, Eurostat, sovereign rating companies websites -4.4% -5.6% -6.4% The Bulgarian economy had a constant growth of above 6% in the period The economy stabilized in 2011 with GDP growth of 1.7% for 2011, which is forecasted to recover to 2.8% in 2012 The budget defi cit in Bulgaria is one of the lowest in Europe for % There are no currency fl uctuations due to a currency board, introduced in 1997 the Bulgarian Lev is pegged at to the Euro Bulgaria has the second lowest government debt to GDP ratio in the EU27 in 2011 Bulgaria is the only European country with an increased credit rating by Moody s since the beginning of

9 Overview of Bulgaria Silistra Vidin Montana Vratza Pleven Lovech Danube Shumen Veliko Turnovo Targovishte Gabrovo Ruse Razgrad Varna Dobrich Pernik Kjustendil Sofia Sofia Distrikt Pazardzhik Plovdiv Stara Zagora Sliven Yambol Burgas Black Sea Blagoevgrad Haskovo Smolyan Kardjali Population Airport Port Agriculture 6% GDP Breakdown 2011 Industry 31% Services 63% Еxports Breakdown Metals 16% Oil products and electricity 14% Food 8% Мachines and equipment 17% Other raw materials 20% Consumer goods 25% 9

10 History Bulgaria was a top-ranking country in the manufacture of chemicals and chemical products for the Eastern Block The petrochemical complex was opened in Burgas now Lukoil Neftochim - Burgas One of the fi rst foreign investments in the country a shoe polish factory in Ruse now Orgachim The soda ash factory in Devnya was built, now the biggest facility of Solvay Group in Europe The pulp and rayon combine Svilosa was opened in Svishtov, built with the latest state-of-theart technologies. 10

11 History...and a global leader in the manufacture of nitrogen and phosphorous fertilizers and soda ash 1980 the chemical industry generated 17.1% of total industrial output and 20.8% of country s exports. In the early 1990ies the country exported over 180 chemical products to more than 80 countries and was among the market leaders for soda ash and nitrogen and phosphorus fertilizers, among others Five Years of Chemistry and Organic Synthesis : oil refi nery capacities more than doubled and production increased over four times. 11

12 History After 1989, the Bulgarian economy welcomed many foreign investors Solvay, Belgium bought 60% of the soda factory in Devnya. Today, this is Europe s biggest soda ash factory in Europe. 1997, 1998, 2004 Holcim, Titan, Italcementi Group modernized cement factories Lukoil acquired 58% in Neftochim Burgas which remains the biggest oil refi nery on the Balkans The US Acid & Fertilizers bought the majority share in Agropolychim. Today, the company exports phosphorus and nitrogen fertilizers to fi ve continents. 12

13 History... resulting in modernized technical and production facilities 1998, 1999, 2001 Henkel, Knauf, Saint Gobain entered the production of construction materials with large capacities The Turkish Şişecam Group built a new glass factory near Targovishte. By 2010, Şişecam increased its factories to four, manufacturing products that are unique to the region. 13

14 INDUSTRY OVERVIEW 14

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16 Exports In 2010, exports of chemical products registered signifi cant growth... EUR mln 150 Exports by product group Inorganic Chemical Products Non-Metal Mineral Products Mineral or Chemical Fertilizers Rubber and Plastic Products Paper and Paper Products Chemicals and Chemical Products Organic Chemicals In 2009, exports were affected by the crisis, but as early as in 2010 recovered to above pre-crisis levels. According to the Ministry of Economy, Energy and Tourism data, the following sectors register high dynamics in 2010 compared to Manufacture of Chemicals and Chemical Products growth at 32%, making up 5.6% of total exports Manufacture of Other Non-Metallic Mineral Products growth at 28%, accounting for 2.8% of total exports Manufacture of Rubber and Plastic Products growth at 31%, making up 2.6% of total exports 16 Source: NSI, MEET, Eurostat

17 Exports...signaling Bulgaria s recovery from the crisis and the fl exibility of its chemical production. Bulgaria s favorable geographic location and competitive production are essential for the exports of chemical and related industries products to all leading global markets. RO others GR PL DE IT RU others AM MD mln EU-27 UA CA MX 63.5 mln Non-EU 48.0 mln US 33.1 mln 20.5 mln mln Middle East CN others IN TW VN PK 16.6 mln others CL BR AR CU 4.7 mln Аfrica 0.8 mln Australia and Oceania Source: Eurostat 17

18 Companies Major multinational companies as well as local competitors are present in Bulgaria Major companies in selected subsectors, 2009 company name Turnover Mln Euro Employees Chemicals and chemical products Location Solvay Sodi Varna Agropolychim Varna Orgachim (Policolor) Ruse Neochim Haskovo Ficosota Syntez Shumen Panchim Stara Zagora Air Liquide Bulgaria Sofia Rubber and plastic products Gotmar Plovdiv Vidahim Vidin Plastchim T Dobrich Hamberger Bulgaria Gabrovo Megaport V. Tarnovo Reynolds Consumer Products Stara Zagora Bulgaria Fibran Bulgaria Sofia Non-metallic mineral products Trakya Glass Bulgaria (Sisecam) Targovishte Drujba Glassworks Plovdiv Devnya Cement (Italcimenti) Varna Zlatna Panega Cement (Titan) Lovech Ideal Standard - Vidima Gabrovo Ytong Bulgaria Sofia Vulkan Cement (Italcimenti) Haskovo 18 Source: NSI, MEET, Eurostat

19 Companies All major subsectors in the chemical industry are uniformly developed in Bulgaria Turnover Emplooyees 2% 2% 4% 11% 12% 41% 28% 2% 3% 4% 5% 12% 38% 36% non-metallic mineral products rubber and plastic products paper and paper products organic inorganic chemicals and chemical products chemical fertilizers Industry as a whole registers turnover at 2.81 b and employment at Non-mineral products account for the highest share, with turnover at 1.13 b Total turnover of Manufacture of Paper and Paper Products stands at 0.32 b and employment in the subsector stands at Turnover in Manufacture of Rubber and Plastic Products stands at 0.79 b Distribution of tunover (mln. ) chemicals and chemical products non-metallic mineral products paper and paper products plastic and rubber products turnover of top 10 companies turnover of the other companies Source: Amadeus 19

20 V Concentration Concentration of chemical Vidin Vratza Sofia Lovech Gabr Plovdiv St 20

21 Concentration producers in Bulgaria by location: Ruse Shumen eliko Turnovo Varna vo Burgas ara Zagora Chemical products, rubber and plastic products, paper Non-metallic mineral products 21

22 Raw Material Bulgaria offers quality fi elds of many raw materials... Mirovo Salt Body near Provadia and the limestone quarry supply the well-developed soda ash production which is both a national and a regional leader Renewable water resources (habitant) SI LV SK BG HU RO EE LT GR TR DE PL CZ Bulgaria is rich in water resources. As rivers are spread uniformly across the country and the coastline along the Black Sea is long and easily accessible, the country boasts high levels of renewable water resources. Quality clay is among the major mineral resources of the country, for which testify the Bulgarian traditions in brick-making The country features a couple of mega fi elds like those near town of Lukovit, the village of Propast and the town of Kardzhali 22 Source: Eurostat

23 Raw Material...near production complexes. Provadia Salt Burgas Oil, gas Sofia Industrial gases Kaolinovo: Feldspar Quartz sand Dolomite Limestone Devnya Soda ash Glass Şişecam Targovishte There are well established chains and networks between companies for supply of materials and services The infrastructure is also well developed - gas transmission networks connect suppliers, an ethylene pipeline is constructed Pirdop Sulfuric acid Aksakovo, Asenovgrad Big bags Fertilizers Agropolychim Devnya Burgas natural gas Phosphates Morocco, Tunisia, Egypt, Syria 23

24 Costs Bulgarian chemical industry is favored by the affordable energy prices in the country... Information refers to natural gas prices (consumption at 0.25 GWh/ year) and electricity prices (consumption at 1 GWh/year) for industrial purposes, at , /kwh. Natural gas Electricity Romania Estonia Bulgaria Lithuania Latvia Poland Czech R. Hungary Slovakia Itlay Germany Slovenia Denmark Denmark Itlay Bulgaria Poland Germany Lithuania Romania Latvia Slovenia Hungary Slovakia Estonia Czech R Electricity and gas prices in Bulgaria are among Europe s lowest, contributing signifi cantly to lower production costs. Bulgaria has the lowest corporate tax in the EU Zero tax rate for companies in regions of high unemployment Corporate income tax rates across Europe Bulgaria Latvia Romania Czech Rep Poland Slovakia Turkey Croatia Slovenia Estonia UK France 10% 15% 16% 19% 19% 19% 20% 20% 20% 21% 28% 33% 24 Source: Energy.eu CEIC

25 Costs...as well as from competitive prices and availability of real estates and industrial terrains. Rental prices of industrial terrains ( /m2/ month), Q Athens 3 Sofi a 3.5 Budapest 3.6 Prague 3.8 Belgrade 4 Bucharest Istanbul Zagreb Warsaw Moscow Sofia Varna Plovdiv min max In 2011, available industrial properties stand at 117 km 2 Sofi a offers one of the lowest industrial property rental prices compared to other European cities Rental prices in Plovdiv and Varna are twice lower compared to Sofi a InvestBulgaria Agency offers incentives for the purchase of industrial properties to qualifi ed investors. Price intervals in suggested industrial zones, ( /m 2 ) Sofia Airport Iskar Station Kazichene/Krivina Voenna rampa/iliantsi Vrazhdebna Ravno pole Elin Pelin Plovdiv Source: Colliers International, Forton International, MBL/CBRichard Elles Varna Prices of industrial property vary between 15 and 180 /m 2 Plovdiv and other Bulgarian cities feature well-developed industrial zones with prices varying between 15 and 30 /m 2 25

26 Logistics 5 Pan-European Transport Corridors cross the territory of the country.

27 Logistics Bulgaria features continuously developing quality infrastructure AIRPORT INTERMODAL TERMINAL RIVER PORT SEA PORT RAILWAY STATION The country is in the focus of road infrastructure projects of the European Commission Port Varna and Port Burgas at the Black Sea offer excellent opportunities for water transport to Russia and Ukraine destinations The ports in Vidin, Svishtov and Ruse on the Danube provide river transport to Western Europe via Pan-European Transport Corridor VII (Rhine-Main-Danube) 27

28 Selected Industrial Zones Sofi a Bozhurishte Industrial Park Convenient for light and semi-heavy industries, warehouses, logistics and distribution centers, showrooms, among others Located on Trakia Highway, 5 km from Lyulin Highway, 30 km from Hemus Highway, 23 km from Sofi a Airport, 150 km from Lom River Port Gas supply; local road network and railway line; direct transport connections to the capital Location: Bozhurishte - Sofi a Total space: m² About 60 industrial zones in Bulgaria offer free spaces and well-developed infrastructure. Sofi a Plovdiv 28 Direct connections to Pan-European Transport Corridors IV, VIII, X Chosen by international names such as Liebherr - Holding GmbH, Ferrero, Schneider Electric, Mercedes Benz, Bosch Group Internal road network, gas supply; customs offi ce Near Trakia Highway; 18 km from Plovdiv Airport Construction of industrial facilities with lease fi nancing from banks and with the required initial permits Plovdiv Location: Plovdiv Free space/total space: / m²

29 Selected Industrial Zones Ruse Industrial Park Location: Ruse Total space: m² Ruse is a big international transport center located on the crossroad of Pan-European Transport Corridors VII and IX and featuring the only bridge over the Danube connecting Bulgaria and Romania Investors: Montupet, Keros Bulgaria, MBM Metalwork Internal road network Gas supply 130km from Hemus Highway, 70 km from Bucharest Airport, 190 km from Varna Airport, 200 km from Port Varna Ruse A catalogue of Industrial Zones in Bulgaria is available at: government.bg/ Burgas funcitioning zone developed zone zone under development Location: Burgas Free space/total space: / m² Burgas Convenient for: environment friendly productions such as IT, textile, engineering, electrical installations Developed infrastructure and complete logistics solutions 15km from Trakia Highway, 12 km from Burgas Airport, next to Port Burgas which handles 2/3 of national imports and exports Internal road network, own railway line Fast and facilitated customs services 29

30 Ecology Bulgaria is a party to the Kyoto Protocol and participates in the EU Emissions Trading Scheme... CO2 emissions and Kyoto compliance of selected EU Member States, Latvia Estonia Slovenia Lithuania Slovakia below Kyoto limits above Kyoto limits CO2 emissions, mega ton,2008 Ireland Hungary Bulgaria Portugal Czech Republic Romania Poland Italy Germany enabling many producers to trade CO2 emissions. case study The producer of mineral fertilizers and other chemical products Neochim AD Dimitrovgrad is a registered operator in the EU Emissions Trading Scheme and has realized sales of excess EUA allowances at a total of 2.2 m. In October 2010, the company launched a project for reduction of nitric acid production emissions under the Kyoto SI mechanism with a value of 1 m. The project is expected to generate about 112 thousand emissions reduction units (ERU) by the end of Source: Eurostat

31 Ecology Large investments in waste treatment and management have resulted in lower emission levels Investment in equipment and pollution control plants in the Chemical and Related Industries, 2008 ( m) Chemicals and Chemical Products Non-Metallic Mineral Products Estonia Lithuania Slovakia Croatia Slovenia Ireland Bulgaria Romania Hungary Poland 0 Bulgarian legislation is aligned with European legislation on all environmental norms The EU REACH Regulation is binding on all companies in the sector Bulgarian companies participate in initiatives such as Responsible Care Responsible care: All of the program s initiatives in Bulgaria are supported by the Bulgarian Chamber of the Chemical Industry At global level, Responsible Care is coordinated by the International Council of Chemical Associations (ICCA) About 30 Bulgarian companies are members of the initiative and report annually on their performance on basis indicators of health and safety at work, major environment pollutants, transport accidents, energy and water consumption Source: Eurostat 31

32 HUMAN RESOURCES 32

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34 Wages Compared to the other countries in the region, Bulgaria offers some of the lowest labor costs in all of the four subsectors Labor cost per employee in full time units, 2008 ( /hour) Country Manufacture of paper and paper products Manufacture of chemicals and chemical products Manufacture of rubber and plastic products Manufacture of other non-metallic mineral products Bulgaria Romania Latvia Lithuania Poland Hungary Estonia Slovakia Czech Republic Slovenia Greece EU (27) Source: Nace rev. Eurostat, NRA

35 Wages Qualifi ed experts with long-standing experience contribute to relatively high labor productivity Monthly average wages in the chemistry sector vary between 300 and 650 depending on the position Average earnings covered by social security, Q (Euro/month) Senior officials 633 Analytical experts 510 Technicians and other applied experts 426 Administrative staff 332 Bulgaria has one of Europe s highest relative labor productivity in the chemical sector Apparent labour productivity by average personnel costs (%) Latvia 173 Bulgaria Estonia Poland Slovakia Lithuania Czech Republic Slovenia Hungary 87 In Bulgaria, 100 of labor cost investments generate 148 of output. Source: Eurostat 35

36 Education Technical secondary schools and universities are located throughout the country... School and university students by course and region Rousse Sofi a Plovdiv Burgas Varna Students in Vocational Secondary Schools Technical Universities There are fi ve technical universities located in the cities of Sofi a, Plovdiv, Burgas, Ruse and Varna 11% of the students major in courses relevant to the needs of the chemical and related industries 34% of the students in vocational secondary schools study related courses 43% of the students in the vocational secondary schools in the sector are concentrated in the cities of Sofi a, Plovdiv, Burgas, Ruse and Varna Many universities have contacts with companies in the sector which offer scholarships programs, trainings and bursaries for young specialists 36

37 Education...and train students in a wide range of related courses. Number of students in accredited tertiary education schools, 2009/2010 academic year, second semester. Machine building and automation Transport and logistics Industrial management Electronics and electrical engineering Pharmacy and cosmetics Organic and inorganic chemistry Electricity and water supply Ecology, recycling Engineering Biotechnologies Other About students in related courses in vocational secondary schools Electronics and electrical engineering students Manufacture of chemicals students Machine building and transport equipment students Other related courses students Source: A.T.Kearney. Ministry of education 37

38 Human Resources Universities Sofia University St. Kliment Ohridski students Courses: Computer Chemistry, Eco Chemistry, Chemistry in Engineering and Contemporary Materials Many of the business and technical programs are taught in English, French or German Double-diploma programs with Paris-Sorbonne, Bordeaux IV, City University Seattle University of Chemical Technology and Metallurgy students Courses accredited by the European Federation of National Engineering Associations /FEANI/ Courses: Chemical Engineering taught in German, Industrial Chemistry taught in French, Material Sciences taught in English Cooperation with universities such as Queen Mary University of London, Hamburg University of Technology, National Polytechnic Institute of Toulouse, among others Burgas Prof. Assen Zlatarov University students Courses: Organic Chemical Technologies, Inorganic Chemical Technologies, Chemical Engineering, etc. Lukoil Neftochim Burgas grants bursaries to top-ranking students Active cooperation with institutes and universities of England, France, Germany, Russia, among others University of Mining and Geology St. Ivan Rilski students Foreign students from almost 40 countries Departments of geology, engineering mechanics, automation, chemistry, environment protection, etc. Complex training and qualifi cation center and local Cisco Networking Academy 38

39 Human Resources Universities Technical University of Sofia students Faculties of automatics, electronic engineering and electrical engineering, mechanical engineering, engineering, etc. Sole representative of BEST for Bulgaria. BEST unites students from 67 technical universities of 27 European countries and organizes engineering competitions and trainings Technical University of Varna students (more than 500 foreign students) Course of Chemical Machine Engineering International Specialized Labor Exchange with employers from Germany, Norway, Denmark, among others A Bulgarian TU Varna student won an international competition for an ergonomic device project for Electrolux Plovdiv University Paisii Hilendarski students Faculties of Chemistry, Biology, Physics, Mathematics, Informatics, among others Independent R&D unit in the fi eld of: Microbiology and Biotechnology, Researches on Utilization of Natural Resources, Environment Protection, Synthesis of New Organic and Inorganic Substances, etc. Ruse University Angel Kanchev students Special partnership program with Cornell University Courses: Chemical Technology, Biotechnology, Ecology and Environment Protection One of the selected by the European Commission TEMPUS program 18 universities from 11 Central European countries that have achieved the best results in the transformation of higher education 39

40 Human Resources Vocational Schools Vocational Secondary School of Chemical Technology Acad. N. D. Zelinskii, Burgas 600 students Courses: Chemical Technology, Technological and Microbiological Control, Ecology and Environment Protection, Production Automation, etc. 12 laboratories, equipment with 10 semi-industrial installations, 5 workshops Since 2001, the school has a contract for cooperation with Lukoil Neftochim Burgas School graduates have the possibility to work in the company Vocational Secondary School of Chemical and Microbiological Technology Prof. Pencho Raikov, Sofia 180 students Courses: Technology of pharmaceutical, perfumery and cosmetics production Technological and microbiological control of chemical production with enhanced English learning In 2011, students from the school took part in and exchange of experience event in Bratislava under Leonardo da Vinci Program The school has established partnerships for educational practice with Weiss Profi l, Lackprom and the University of Chemical Technology and Metallurgy 40

41 Human Resources Vocational Schools Vocational Secondary School of Chemical and Food Technology Prof. Dr. Assen Zlatarov, Dimitrovgrad 320 students The fi rst of its kind secondary school of chemical technology in Bulgaria Courses: Automation of continuous production processes, Technological and microbiological control of food production, Technology of pharmaceutical and perfumery and cosmetics products, among others Together with the IUPAC Committee on Chemistry Education, the school participates in the global project Water: A Chemical Solution for development of a global map of the quality of water resources across the world Educational practices are organized in time-tested companies such as Neochim, Vulkan Cement, among others Vocational Secondary School of Electrical Engineering and Automation, Sofia 700 students Courses: Automated Systems, Automation of Continuous Production Processes, Electrical Machines and Apparatuses, etc. Every year the school participates in the Manager for a Day initiative organized by Junior Achievement Bulgaria Production practice is a compulsory element of the education process 41

42 SUCCESS STORIES

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44 Success Stories Solvay Sodi Established: 1954 Location: Devnya Employees: 700 Products: soda ash and sodium bicarbonate Solvay Sodi is Solvay s biggest European factory for manufacture of soda ash with a capacity of 1.5 million tons per year In 2000, Solvay Sodi privatized the suppliers of material for the soda production process the salt and limestone mining enterprises and Deven Thermoelectric Power Plant 85% of company s output is exported to Eastern and Western Europe, Russia, the Middle East, South America, Asia and Africa investments at 306 m ( 150 m in the past three years) The company accounts for about 1% of Bulgaria s exports. Soda ash is the main raw material in glass production, metallurgy, paper, chemical and leather industries and in detergents production. The materials and resources located in proximity to operational capacities and the convenient transport corridors (Varna West Port) were the main factors which motivated Solvay to launch business in Bulgaria. 44

45 Success Stories Solvay Sodi Cogeneration the most innovative energy production method: Within the new production capacity investment program, a circulating fl uidized bed boiler worth 75 m was commissioned in Deven Thermoelectric Power Plant in The installation is with emissions levels fully compliant with the latest European CO2 and other emissions standards. This is the biggest thermoelectric cogeneration plant on the Balkans. In 2006, Solvay Sodi launched an ISO certifi ed integrated management system in accordance with ISO quality and environmental regulations and OHSAS health and safety regulations. The company has won a number of corporate social responsibility awards in Bulgaria It cooperates with universities, offering visits and internship programs for students majoring in different subjects Solvay Group is the fi rst main partner and technology partner of Solar Impulse the zero-fuel airplane. The prototype was fi rst exhibited in Bulgaria on the Day of Chemistry at Solvay Sodi, Devnya, on

46 Success Stories Agropolychim Established: 1974 Location: Devnya Employees: 950 Products: nitrogen and phosphorus fertilizers Manufacture of complex fertilizers (DAP, MAP) has been launched Environmental investment projects at more than 50 m in value. Major ones include: Ammonium nitrate installation with design capacity of t/24h Water treatment plant for the waste water from phosphorus production implemented in cooperation with the Danish Environmental Protection Agency DEPA Liquefi ed ammonia terminal with a capacity of t New phosphor-gypsum waste depot with a total capacity of 7.3 m tons Agropolychim plans to construct in cooperation with Port Varna West a unique logistics hub for liquid cargo Share of exports in production varies between 55% and 70% Markets: Europe, Latin America, Middle East, Asia 2010 exports total 390 thousand tons Studying the market in order to make our investment, we found out that this was the best place for doing business in the region. Start-up requirements were very clear and the available assets provided a good basis. Krasimir Berbenkov, Executive Director, Agropolychim 46

47 Success Stories Neochim Established: 1951 Location: Dimitrovgrad Employees: Products: nitrogen fertilizers, ammonia and other chemical products Neochim is the fi rst fertilizer factory in Bulgaria with a history dating back more than 60 years launch of mixed fertilizer production - NPК In 2008, Neochim developed in cooperation with the Russian research institute OAO GIAP (Moscow) pioneer technologies for reconstruction of the ammonium nitrate shop 2008 ammonium nitrate production capacity of AC-72 increased by 50% 50 m in investment over the past 10 years, further 15 planned In 2008, 37% of the exports of ammonium nitrate went to the markets of North and South America and 63% to Europe Neochim grants bursaries and paid internships to school and university students of related subjects (more than 120 internship trainees over the past 5 years). The company participates and makes presentations at prestigious international forums and exhibitions such as Nitrogen and Syngas 2009 in Rome. case study In 2010, Neochim AD received the European Bank for Reconstruction and Development (EBRD) s energy effi ciency and renewable energy award. The winner project is for a turbine-generator station for capturing the waste steam generated by the production of nitric acid. The project was implemented in cooperation with EnCon Services and with an ERBD grant. 47

48 Success Stories Orgachim Established: 1901 Location: Ruse Employees: about 500 Activities: manufacture of paints, lacquers, resins, phthalic anhydride One of the fi rst foreign investments in Bulgaria in 1901 two Jews found a shoe polish and lacquers factory Majority owner is the English RC2 Fund and the parent company is the Romanian Policolor More than 60% of the paints and lacquers are intended for the Romanian market and about 80% of the resins are exported to countries such as Romania, Serbia, Belgium, Austria, etc. Since 2009 the entire manufacture of paints and lacquers has been moved from the Romanian factory to Bulgaria The EuroBioRef project where Orgachim AD is one of the 28 partners from 14 countries was launched in The project addresses the complete process of biomass transformation from the agricultural product to the commercial end products. Bulgaria has talented young people open to learning and adopting others experience. I feel at home here. The investment conditions here are wonderful. The country has large capacity to produce law materials locally. Achille Bardelli Member of the Board of Directors 48 The company invests about 2 m annually in production automation, capacity enhancement and improvement of working conditions As a Responsible Care member, in 2011 Orgachim organized an opendoors day

49 Success Stories Lackprom Established: 1919 Location: Sofi a Employees: 130 Products: paints and lacquers, priming, glues, insulations Company s products have passed successfully the quality and safety tests. They were used in: Mitsubishi in the construction of Burgas Port For bee hives in England Children s toys for IKEA, Simba Toys A German construction company for the construction of three waste landfi ll sites in Bulgaria Pertoleum terminals Ilientsi, Lukoil AD, Pertol AD Has an accredited laboratory and invests in external laboratories for specialized tests such as food contact and salt spray, among others The only Bulgarian paint and lacquer company with a xenotest Medal winner at Bulgarian and international fairs and exhibitions (Rome , Plovdiv) The company employs highly qualifi ed people the staff is well trained. Haralambi Haralambiev, Executive Director, Lackprom AD Specialized products are exported directly but also through company s corporate customers from machine engineering, wood and furniture, cars, energy sectors, among others 49

50 Success Stories Svilosa Established: 1974 Location: Svishtov Employees: 480 Products: bleached kraft pulp The only producer of sulphate bleached hardwood kraft pulp on the Balkans The factory underwent two major reconstructions in 1992 and 2007; the 2007 investment amounts to 60 m More than 80% of the wood used in the production comes from self-healing wood types The fi rst Bulgarian company with a contract for sale of carbon emissions Every year Svilosa grants qualifi cation improvement bursaries to its employees Top ranked by one of the most reputed economic publications as the fastest growing Bulgarian company in 2010 with almost tenfold growth in revenues compared to % of production is export oriented (%) Sales by country, 2010 As the standard of living improves, paper consumption will increase in Bulgaria as well as globally. Mihail Kolchev, Executive Director, Svilosa TR IT GR RO SA BG DE RS CN Others

51 Success Stories Air Liquide Established: 1999 Location: Sofi a Employees: 85 Products: industrial gases The company supplies its products to customers in many Bulgarian industries, including metallurgy, food, pharmacy and medicine, environment protection, among others The company offers a wide range of logistical solutions and technical expertise Exports to Romania, Greece, Serbia and other countries of the region Air Liquide produces gases in Bulgaria whereas most of the other companies rely on imports In 2010 and 2011, the company invested 25 m in the air separation installations of its two biggest production facilities in Pirdop and Pernik, as well as in Gabrovo. We believe that our company will continue to invest in this country. Francis Bucquet, CEO, Air Liquide Bulgaria The in-house communication and training system facilitates the global exchange of technologies and skills within the group. It is a pity that Bulgaria is not a wide-known investor destination because the country has enormous development and growth potential. It has the necessary production tools and installations, motivated business people, competitive costs and a growing market. Bulgaria is a fi nancially well managed country. Francis Bucquet, CEO, Air Liquide Bulgaria 51

52 Success Stories Plastchim - T Established: 1967 Location: Tervel (Dobrich district) Aksakovo(Varna district) Employees: 800 Products: fl exible packages, fi lm Company s products include polypropylene yarn and fi lm, BOPP fi lms, polypropylene sewn bags, bottom bags, fl exible packages (Flexible Intermediate Bulk Container) Close to 30 m in investment over the past 9 years More than 80% of production is sold at the markets of Central Europe. Expansion to Western Europe and North Africa is pending Bulgaria benefi ts from the advantage of being the Eastern gate to Europe. Its location also contributes to shorter delivery times, which is often very important. Aydan Faik, Executive Director, Plastchim - T 52 Since 1998, Plastchim T is the only Bulgarian producer holding a Portabulk license by Hydro Packaging (Cronus Packaging System). Since 2006 it also holds a Levoloop license Future investment plans: Increase fl exible packages (big bags) production capacity by 25% Cast polypropylene production, capacity 8500 t/year New biaxial polypropylene fi lm line with a capacity of 30 thousand tons/year (the capacity of the two existing lines is 25 thousand tons/year).this will be a unique production for Bulgaria as well as for many countries of the region a topranking technology

53 Success Stories Zebra Established: 1929 Location: Novi Iskar Employees: 125 Products: technical rubber products The fi rst Bulgarian producer of rubber products Wide product range, works with US know-how and license since 1981 The company uses proprietary product engineering developments and tooling equipment 60-70% of the production is exported to Europe, US and the Balkan countries Cooperates with international partners such as Caema, Alfagomma, Hormann, Kontitech, among others Zebra is an active member of the international initiative Responsible Care Zebra s rubber products are used in the construction of Sofi a Metropolitan. Zebra AD reports 2011 growth in sales at 72% compared to the previous year. The cogeneration module worth 1 m is the latest investment towards energy effi ciency and environmentally friendly production. The subsector is on an upward trend nationally, reporting growth in exports at 12% in the fi rst half of

54 Success Stories Bunay Established: 1968 Location: Panagyurishte Employees : 170 Products: rubber and plastic products Bunay SA works for partners such as Liebherr, IKEA, Reckitt Benckiser, among others The company exports its products to companies in the Czech Republic, Hungary, Germany, Italy, etc. Further to its core production, the company also has departments of ultrasonic welding, assembly, painting and screen printing There is a special repair mechanical department for repair and production of new moulds The company aspires to integration with the sectors of mechanical engineering, motor-car construction, electrical manufacturing industry, etc. Bulgarian plastic production is well-placed. Due to the technological specifi cs, the cost of rubber processing in Bulgaria is considerably lower compared to Western Europe and this makes the country an inviting place to move such production. Bonka Natova, Head of Marketing and Sales, Bunay SA 54

55 Success Stories Assenova Krepost Established: 1964 Location: Asenovgrad Employees: 670 Products: transport packages, consumer packages, polymers Assenova Krepost is the biggest packages factory in Southeastern Europe It offers fi lm and print, woven bags, fl exible containers for the food, chemical and other industries 34-45% of production is intended for export to Ukraine, Georgia, Turkey and Europe Raw materials (polyethylene and polypropylene) are imported from Middle East countries New stretch fi lm and cast polypropylene fi lm capacities have been commissioned in the past few years A major supplier of fertilizer big bags to companies such as Neochim The company holds a patent for a special fi ve-ply sausage sleeve which was awarded a golden medal at the Plovdiv International Fair. It is a winner of awards at international fairs and forums such as Agrotica 2000 an international fair for agricultural machinery, equipment and suppliers 55

56 Success Stories Trakya Glass Bulgaria Established: 2005 Location: Targovishte Employees: Products: fl at glass, household glass, auto glass, processed glass FLT Şişecam - Trakya Glass is the biggest green-fi eld investments in Bulgaria, at 304 m in present value The glass complex comprises glassware, fl at glass, household glassware, mirrors and car glass factories. The investment project phases were completed in the period The fl at glass and glassware factories use local raw material (sand, soda ash, dolomite and limestone) The glassware factory hosts the biggest glass furnace on the Balkans. Major customers include IKEA, Coca Cola, Tesco, Walmart, among others The household glassware factory manufactures processed glass for the ovens and refrigerators of Indesit, Bosch, Electrolux, etc. 56

57 Success Stories Trakya Glass Bulgaria The fl at glass factory is the fi rst of its kind on the Balkans. Flat glass is a high-tech product used mainly in the construction, car-making and furniture industries, in household appliances and agriculture, in energy-generation solar collectors and solar cells Şişecam Bulgaria delivered 6 m glasses for the 2006 Football World Championship in Germany, or half of total order. In 2010, the company delivered the whole order of 13 m glasses for the championship in South Africa. Şişecam s latest project in Bulgaria is its 2011 investment in an auto glass factory whose customers include Audi, BMW, Dacia, Ford Europe, and Renault Capacities generate 128 m in annual revenues ( 113 m in international sale revenues) Future plans of the company: Investment in another production complex of four different productions: fl at glass, glassware, energy-saving glass and laminated glass Increased auto glass output capacity Total planned investments about 200 m 57

58 Success Stories Saint-Gobain Weber Bulgaria Established: 2001 Location: Kostinbrod Employees: 82 Products: construction and technical mortars 2009 fi rst plant for dry mixtures and mortars with a capacity of 100 thousand tons opened in Kostinbrod 2011 second plant opened near Varna, as well as end-user consulting centers in Plovdiv, Burgas, Varna and Sofi a To date, investment in Bulgaria totals 12 mln. Winner of the 2009 Best Employer Award in the SME category, ranking 4th in the Hewitt Associates study The company launched in Bulgaria its innovative product: dust-free light tile adhesives 100%-recyclable, waste-free, no-water technology is implemented in the factories Weber is one of the fi rst members of the Green Circle of Bulgarian Companies established in June Currently, the company focuses on the local market Company s perspectives lie mainly in developing the professional network in the fi eld of thermal and hydro-insulation, rehabilitation and reconstruction of existing buildings 58

59 Success Stories Knauf Bulgaria Established: 1993 Location: Sofi a Employees: 190 Products: plaster board, gypsum fi ber board panels The company has two factories in Bulgaria: M&A Project 1997 Vidin, gypsum fi ber board panels factory, exports to 25 countries globally Greenfi eld project 2007 Mednikarovo, plaster board factory export to Romania Expansion project Mednikarovo - mortars factory in the design phase To date, investment totals 85 m Cooperation with the German Bulgarian Institute in Pleven for dry construction training. More than 1000 erectors have been awarded certifi cates so far Each year the company participates in and sponsors the Panorama of Vocational Education organized by the Ministry of Education. The winning team goes to Knauf s international competition (Knauf JuniorTrophy) Knauf s investment projects in Bulgaria were implemented smoothly compared to other company s projects in other countries. Therefore we believe that Bulgaria is a very good place to invest. The three factors which contributed to a decision in favor of Bulgaria as a place to invest included: access to our core raw material, country s geographic location and the current tax situation. Ingrid Janker, CEO, Knauf Bulgaria 59

60 Success Stories Keros Bulgaria Established: 2005 Location: Ruse Employees: 150 Products: ceramic tiles Bulgaria was chosen as a place to invest mainly because of its location on a cross road and near customers As transport costs account for 25% of the product s end price, low transport costs and small distances are advantages of Bulgaria Company s investment amounts to 26 m 85% of production is for export Keros Bulgaria serves the Balkan, Russian and Middle East markets The Bulgarian factory is equipped with a newer generation technologies compared to the one in Spain The company plans to double its capacity, investing 12 m in the next 2 years Bulgaria has enormous potential and I believe that in the next 5-10 years more Spanish companies will be attracted by the business environment in the country. Salvador Ferrer Ballester Executive director Keros Bulgaria The environment in Bulgaria is very welcome, in particular the higher authorities were of great help. Salvador Ferrer Ballester Executive Director In Bulgaria, it is easy to fi nd welltrained people speaking foreign languages, but that is not the case in Spain. Salvador Ferrer Ballester Executive Director, Keros, Bulgaria 60

61 Success Stories Wienerberger Bulgaria Established: 2004 Location: Sofi a, Lukovit Employees: 85 Products: clay bricks The factory in Lukovit is an investment of 30 m, implemented in just 10 months A pioneer for Bulgaria in the production of higher-quality large format clay blocks with vertical perforation The clay of the Lukovit fi eld has proved to be among the top-quality materials in Wienerberger Group Qualifi ed and motivated staff; 90% от employees are people from the region The factory operates entirely on natural gas to achieve environment friendly production 2008 the new Wienerberger factory in Bulgaria is the world s facility of the group (among 260 other). It is a prototype of the latest generation of mega factories fully robotized and automated. Innovative technologies implemented in this plant were used later in Group s other expansions Wienerberger Bulgaria is among the fi rst fi ve top-ranking companies of the group in terms of low energy consumption, cost effectiveness, operating profi t, health and safety at work Bulgaria offers traditions in the production and use of ceramic tiles as well as rich reserves of quality raw material. The market hides great potential. Atanas Buglov, Manager, Wienerberger EOOD 61

62 Success Stories Devnya Cement Established: 1999 Location: Devnya Employees: 350 Products: cement Offers on the market more than 30 different types of specialized products Italcementi Group invested more than 200 m in Bulgaria Company s location is a key to its success. The enterprise continues to expand its land and sea exports mainly to neighboring countries and the Black Sea markets According to company s director, these exports are favored by the historical relations of the countries in the region The company continues to expand its operations in Bulgaria building a new modern nature-friendly cement installation Devnya Cement AD recently started exporting to Russia as a major supplier for the 2014 Winter Olympics in Sochi. 62

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66 IBA Services: Macroeconomic information Legal advice Information on operational costs Regional data on unemployment, availability of skilled labour force, level of education, infrastructure, foreign investors and industrial zones Recommendation of vacant land Identifi cation of potential suppliers, subcontractors or joint venture partners Individual administrative services Contacts with the central and the local authorities Contacts with industry chambers, local universities and NGOs 66

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68 Investing in your future EUROPEAN UNION European Regional Development Fund OP Development of the Competitiveness of the Bulgarian Economy Project Promoting the advantages of investing in Bulgaria BG 161PO C0001, with beneficiary InvestBulgaria Agency, has been implemented with the financial support of the European Union through the European Fund for Regional Development and the national budget of the Republic of Bulgaria. InvestBulgaria Agency 31 Aksakov Street Sofi a 1000, Bulgaria Tel.: Fax: iba@investbg.government.bg